SAMAL CONSTRUCTION P. LTD.,PUNE vs. ADDITIONAL COMMISSIONER OF INCOME-TAX,

PER D. KARUNAKARA RAO, AM:

This is the appeal filed by assessee against the order of CIT(A)-10, Pune, dated 09.02.2016 for the A.Y. 2011-12.

“1. On the facts and in the circumstances of the case and in law, the Lower Authorities has erred in levying penalty u/s.272A(2)(k)/274 r.w.s. 200(3) of the Income Tax Act, 1961 a sum of Rs.40,000/-by not considering the reasonable cause in filing the TDS return belatedly.”

2 ITA No.1124/PUN/2016 Samal Construction P. Ltd.

as assessee-in- default and invoked the provisions of section 272A(2)(k)

and levied penalty of Rs.40,000/- .

the CIT(A). The CIT(A) after considering the submissions made by the

assessee and discussing the provisions of section 273B confirmed the

penalty levied by the AO.

before the Tribunal with the ground extracted above.

attention to the ground and submitted that this is the case of levy of

penalty u/s.272A(2)(k) of the Act amounting to Rs.40,000/- for delay of

400 days in filing the TDS return relating to 4th Quarter. He submitted

that assessee has duly deducted and paid the TDS to the Govt. within

the prescribed time but there was delay in filing the return. Giving the

reasons for delay, assessee submitted that during the year under

consideration the company was going through huge financial problems

and there were delay in payment of salaries as such there was a

substantial turnover of staff including the accounts department and the

company was left out with only one accountant who had gone on leave

on account of her illness and therefore, there was delay in filing the TDS

return. He submitted that the delay in filing the TDS statement does not

involve any revenue loss and is merely a technical default. Ld. Counsel

for the assessee submitted that AO levied the penalty without

considering the reasonable cause given by the assessee.

covered issue in favour of the assessee by virtue of decision of the Pune

3 ITA No.1124/PUN/2016 Samal Construction P. Ltd.

Bench of the Tribunal in the case of Nav Maharashtra Vidyalaya Vs.

Addl.CIT (TDS), Range, Pune and others in ITA No.832/PN/2016 &

others, dated 07-10-2016 for the A.Y. 2011-12 and submitted that, the

reasons for delay since common, the said decision of the Tribunal apply

to the facts of the present case. Ld. Counsel also filed the copy of said

order of the Tribunal.

the CIT(A).

well as the decision relied on by the Ld. Counsel for the assessee on the

issue under consideration. On perusing the facts of the case, we find

this is a case where the assessee remitted the TDS in time and however,

there was a delay of 400 days in filing the TDS return for 4th Quarter.

There is no dispute on the fact that the assessment year under

consideration is A.Y. 2011-12. The case of the Revenue is that the

reasonable cause specified in the provisions of section 273B of the Act is

not applicable to the penalty levied u/s.272A(2)(k) of the Act. In this

regard, we have perused the relevant provisions and find the authorities

are not correct in interpreting the said provisions as there is no reference

to section 272A(2)(k) in the section 273B of the Act. We also find the

reason stated by the assessee before the CIT(A) that the delay in filing

the TDS return is due to financial stringency of the company on one side

and illness of Accountant of the Company on other side which are found

to be reasonable causes.

9.1 Further, we find the Pune Bench of the Tribunal in the case of Ajay

Narayanrao Sayalkar Vs. JCIT in ITA No.715/PUN/2016, dated 25-01-

4 ITA No.1124/PUN/2016 Samal Construction P. Ltd.

2018 for the A.Y. 2011-12 had an occasion to decide similar issue and

granted relief to the assessee as per the discussion given in Para No.8 of

the order. While allowing the appeal of the assessee, the Tribunal

followed the consolidated order of the Tribunal in the case of Nav

Maharashtra Vidyalaya Vs. Addl.CIT (TDS), Range, Pune and others in

ITA No.832/PN/2016 & others, dated 07-10-2016 for the A.Y. 2011-12.

Therefore, we find it relevant to extract the operational para of the

Tribunal in the case of Ajay Narayanrao Sayalkar Vs. JCIT (supra) here

as under :

“8. The case of the assessee before us is that the delay in submission of e-TDS return was because of the problem of awareness of Return Preparation Utility, which was updated by NSDL in the first year, i.e. assessment year 2011-12. Because of the requirement of e-TDS furnishing of TDS statement arising for the first time in assessment year 2011-12, there were problems faced by the assessee and hence, the delay in filing quarterly TDS return late. We hold that the assessee had reasonable cause in not furnishing the same in time and in view of the provisions of section 273B of the Act, we hold that the assessee is not liable to levy of penalty under section 272A(2)(k) of the Act. Hence, the Assessing Officer is directed to delete the same.”

We find it is not the case of the Revenue that the assessee is a habitual

defaulter in filing the TDS returns late. Since the facts of the present

case are similar to the one adjudicated by the Tribunal, we hold that

assessee is not liable to penalty u/s.272A(2)(k) of the Act. Accordingly,

the ground raised by the assessee is allowed.

Order pronounced on 19th day of September, 2018.

Sd/- Sd/- (िवकास अव�थी /VIKAS AWASTHY) (डी. क�णाकरा राव/D. KARUNAKARA RAO) �ाियक सद�/JUDICIAL MEMBER लेखा सद�/ACCOUNTANT MEMBER

पुणे / Pune; िदनांक / Dated : 19th September, 2018. Satish

5 ITA No.1124/PUN/2016 Samal Construction P. Ltd.

आदेश की &ितिलिप अ(ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��थ� / The Respondent. 2. 3. The CIT (Appeals)-10, Pune. 4. The CIT (TDS), Pune. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब#च, 5. पुणे / DR, ITAT, “A” Bench, Pune. गाड& फ़ाइल / Guard File. 6.

आदेशानुसार / BY ORDER,

// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.